BELARUS NEWS AND ANALYSIS

DATE:

04/01/2010

Russia, Belarus in Oil Spat

MOSCOW -- Russia is continuing to negotiate with Belarus over 2010 oil shipments, with officials saying Russia won't shut off oil bound for Europe under any foreseeable circumstances, even as it halted shipments to Belarus refineries, according to news-agency reports.

"The transit of oil across Belarus won't be cut under any circumstances," Transneft Vice President Mikhail Barkov said, adding he had hopes of a possible solution Sunday, according to Russian state newswire RIA Novosti. The two countries failed to come to an agreement Dec. 31 about Russia's oil supplies to Belarus. Russia insisted Belarus must pay a higher price including export duties for oil sent onward to Europe, while Belarus sought to charge higher fees for transit across its territory.

Oil has stopped flowing to Belarus refineries, but the Naftan and Mozyr refineries have enough crude to continue for about a week without new supplies, Reuters reported Sunday, citing oil traders.

The spat between Moscow and Belarus threatens a nascent customs union among Russia, Belarus and Kazakhstan that was to be used to help the countries accelerate membership in the World Trade Organization, Interfax reported Saturday. Russia is the main ally and sponsor of Belarus, but relations between the two ex-Soviet neighbors have been increasingly strained by financial arguments.

The Belarussian cabinet said Sunday that the two failed to agree on terms for oil exports and that Moscow's demand that Belarus pay a higher tax on the bulk of Russian oil shipments contradicted an agreement on customs union signed late last year.

It also said that Russian officials put "unprecedented pressure" on the Belarussian delegation at Sunday's talks and that this was "totally unacceptable."

Source:

http://online.wsj.com/article/SB126255698457614053.html?mod=WSJ_hpp_RIGHTInDepthCarousel


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